2nd Sep 2005 12:00
IS Solutions PLC02 September 2005 I S SOLUTIONS PLCINTERIM RESULTS Statement by the Chairman, Barrie Clark The interim results for the 6 months ended 30th June 2005 are in line with theBoard's expectations: Pre-tax profits increased by 67% to £105,000 (2004:£63,000) and earnings per share moved up by 60% to 0.40p (2004: (0.25)p) onturnover of £2.57 million (2004: £2.85 million), down 9.8%. Cash remains strongat £1.8 million (31st December 2004: £1.9 million, 30th June 2004: £1.8million). The Board has noted in the accounts an overdue debt of £110,000,primarily in respect of software development work (in which the Company retainsthe IPR): it believes this to be fully recoverable. Throughout the first half of 2005 we have continued to see a gradual improvementin the general business climate for IT related expenditure with companies atlast having to revitalise their IT infrastructure and services after the dearthof capital expenditure post Y2K. The recurring revenue stream from ourOutsourced Services and Financial Feeds continues to cover a substantialproportion of overheads. Although we have seen some shrinkage in the FinancialFeeds market we are also seeing an increase in Project work which should offsetthis over the course of the year. As we stated at the year end our strategy for 2005 was to broaden our softwareproduct portfolio through the formation of strategic relationships or byacquisition. In the first six months of the year we have been appointed as theUK Systems Integrator and reseller for Watchfire- this relationship has alreadystarted to produce revenues and, although the sales cycle is quite long forthis type of product, the prospects are encouraging, especially in the financialsector. In addition we reached an agreement with Macromedia to become their training andimplementation partner for their newly launched product 'Breeze' - Webcommunications software that allows online meetings, training and presentationsto be carried out with ultimate ease. Breeze is deployed using Macromedia'sFlash Player, already installed on more than 98% of browsers worldwide (Source:Macromedia) and, although it is early in the product's life, the level ofinterest being shown is encouraging. GetMeThere.co.uk (our joint venture website with Toyota GB), has been awardedfive stars and named as the Best Site in an Auto Express review of online routeplanners, beating off competition from the AA, MultiMap and the RAC. As Managersand Developers of the site, we have continued to expand the range of trafficapplications and we recently launched 'TARA Mobile SatNav' - a unique 'Pay asyou Go' mobile navigation system for Smartphones and PDA's. In line with our re-introduction of dividend payments last year, the Board ispleased to announce a dividend for the half year of 0.1.3p per ordinary share,which reflects both the improving trading environment and the strong balancesheet and cash position of the Company. The interim dividend will be paid on11th October 2005 to shareholders on the register at the close of business on16th September 2005. Outlook The outlook continues to improve as we move into the second half of the yearwith new projects being won which should lead the Company back to top linegrowth as the new products become more established through the second half ofthe year and into 2006. We will continue the broadening of our product portfolioand this policy, coupled with the general increase in levels of business, leadsthe Board to remain optimistic about the Company's prospects and the Board'sexpectations for the current year. On behalf of the Board Barrie Clark, Chairman. 2nd September 2005 Consolidated income statement for the six months ended 30th June 2005 (unaudited) 6 months ended Year ended 30th June 31st December 2005 2004 2004 restated restated £'000 £'000 £'000Continuing operations Turnover 2,573 2,849 5,514 Cost of sales (1,358) (1,602) (3,038)Gross profit 1,215 1,247 2,476 Distribution costs (699) (841) (1,709) Administration expenses (449) (370) (1,167)Profit/(loss) from operations 67 36 (400) Investment income 38 27 76Profit/(loss) before tax 105 63 (324) Tax (5) - 72Profit/(loss) for the period 100 63 (252) Attributable to minority interests - (1) (34)Profit/(loss) attributable to equity holders of the parent 100 62 (286)Earnings per share Basic and diluted 0.40 p 0.25 p (1.15)pDividends Amount paid per share (2005 proposed) 0.13 p 0.10 p 0.30 p Reserves absorbed 31 25 48 Consolidated statement of changes in shareholders' equity for the period(unaudited) 6 months ended Year ended 30th June 31st December 2005 2004 2004 restated restated £'000 £'000 £'000 Profit/(loss) for the period 100 63 (252)Total recognised income and expense for the period 100 63 (252) Attributable to minority interests - (1) (34) Purchase of own shares - - (102) Dividends (48) - (25)Change in shareholders' equity for the period 52 62 (413) Shareholders equity at start of year 2,541 2,954 2,954Shareholders' equity at end of period 2,593 3,016 2,541 Consolidated Balance Sheet as at 30th June 2005 (unaudited) At 30th June At 31st Dec 2005 2004 2004 restated restated £'000 £'000 £'000Non-current assets Goodwill 100 536 100 Other intangible assets - 28 - Property, plant and equipment 275 286 299 375 850 399Current assets Trading investments - 4 - Trade and other receivables 1,544 1,593 1,404 Tax repayable - - 33 Cash and cash equivalents 1,809 1,822 1,910 3,353 3,419 3,347Total Assets 3,728 4,269 3,746Current liabilities Trade and other payables (1,130) (1,265) (1,224) Tax liabilities (5) (40) - (1,135) (1,305) (1,224)Total liabilities (1,135) (1,305) (1,224)Net assets 2,593 2,964 2,522 Equity Share capital 496 496 496 Share premium account 1,783 1,783 1,783 Own shares (102) - (102) Retained earnings 416 737 364Attributable to equity holders of the parent 2,593 3,016 2,541 Minority interests - (52) (19)Total equity 2,593 2,964 2,522 Consolidated Cash Flow Statement for the six months ended 30th June 2005(unaudited) 6 months ended Year ended 30th June 31st December 2005 2004 2004 restated restated £'000 £'000 £'000Operating activities Profit from operations 67 36 (400)Adjustments for: Depreciation of property, plant and 49 68 137 equipment Amortisation of intangible assets - 27 55 Impairment of goodwill 19 - 436 (Increase)/decrease in debtors (140) (88) 101 (Decrease)/increase in creditors (94) 235 194Cash generated by operations (99) 278 523 Income taxes repaid 33 1 -Net cash from operating (66) 279 523activitiesInvesting activities Interest received 38 27 61 Proceeds on disposal of trading - - 19 investments Purchase of tangible fixed assets (31) (47) (129) Sale of tangible fixed assets 6 12 12Net cash from/(used in) 13 (8) (37)investing activitiesFinancing activities Dividends paid (48) - (25) Purchase of own shares - - (102)Net cash used in financing (48) - (127)activitiesNet (decrease)/increase in cash and cash equivalents (101) 271 359 Cash and cash equivalents at start of 1,910 1,551 1,551 yearNet funds at end of period 1,809 1,822 1,910 Notes to the interim financial statements 1 Basis of preparation The interim financial information for the six months ended 30 June 2005 and 30 June 2004 does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985 and has not been audited by the Group's auditors. The financial information for the year ended 31 December 2004 is also unaudited. It has been extracted from the statutory accounts for that year which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain a statement under s237(2) or (3) of the Companies Act 1985 but has been restated for the changes required as a result of the transition to International Financial Reporting Standards. The interim financial information has been prepared on the basis of the accounting policies and presentation required by those International Financial Reporting Standards, incorporating International Accounting Standards (IAS's) and Interpretations (collectively IFRS), which are expected to be endorsed and applicable for use in the company's annual financial statements for the year ended 31 December 2005. 2 Earnings per ordinary share The earnings per share figure of 0.40p (2004: interim 0.25p, final (1.15)p loss) has been calculated on the basis of a profit attributable to the equity shareholders of the parent for the period of £100,000 (2004: interim £62,000, final £(286,000)) and the weighted average number of shares in issue of 24,793,190 (2004 interim and final: 24,793,190). The share options in issue had no dilutative effect on the loss per ordinary share in any of the periods disclosed. 3 Transition to International Financial Reporting Standards (IFRS) These are the Group's first interim financial statements for part of the period covered by the first annual consolidated financial statements prepared in accordance with IFRS. In line with the transitional provisions set out in IFRS1, the directors have reviewed the Balance Sheets, Income Statements and Cashflow Statements for the comparative periods set out in the financial information to consider whether any adjustments are required in order to align the numbers previously reported under UK GAAP with IFRS. Where necessary the amounts previously reported in accordance with UK GAAP have been adjusted. In the opinion of the directors there were three areas where there could have been material differences: Employee Share Options - In line with IFRS 2, employee share options are required to be fair valued at the date of grant and the resulting charge expensed through the income statement over the vesting period. Having performed the necessary calculations, in the opinion of the directors, the charge required in respect of options granted by the company is not material and thus no adjustment has been made. Dividends - Following IAS 10, dividends are now accounted for when paid, and not when proposed. Goodwill - In line with IFRS 3, goodwill is no longer amortised but is, instead, subject to an annual impairment test. In the opinion of the directors, the only adjustments affecting the cashflow statement were presentational in nature. The adjustments to net assets and profit before tax were as follows Net assets Profit Profit before tax before tax 30/06/04 30/06/04 30/06/04 31/12/04 Reported balance 2,725 (151) (151) (317) Dividends 25 - - - Goodwill 214 214 214 (7) Restated balance 2,964 63 63 (324) 4 Trade and other receivables An overdue debt of £110,000 relating to software development remained unpaid at the reporting date. The customer is well advanced in obtaining Venture Capital funding, and IS Solutions retains the Intellectual Property Rights in the software. The Directors consider that successful funding is highly probable, and that otherwise the value of the IPR is sufficient to cover the debt. They do not consider that a provision is necessary. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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